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DECREE

STIPULATING THE APPLICATION OF THE BANKRUPTCY LAW TO CREDIT INSTITUTIONS

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 24, 2004 Bankruptcy Law;

Pursuant to the December 12, 1997 Law on Credit Institutions, and the June 15, 2004 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

At the proposal of the Governor of the State Bank of Vietnam,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Decree stipulates the application of the Bankruptcy Law to credit institutions regarding conditions and filing of applications for opening of bankruptcy procedures; determines property obligations and asset-preserving measures in bankruptcy procedures; conditions and procedures for restoring business operations, procedures for asset liquidation and bankruptcy declaration; rights, obligations and responsibilities of applicants for opening of bankruptcy procedures, of credit institutions requested to be declared bankrupt and of persons participating in settling applications for declaring bankruptcy.

2. This Decree applies to credit institutions established and operating under the Law on Credit Institutions.

Article 2. Bankruptcy procedures

1. Except for the case specified in Clause 2 of this Article, bankruptcy procedures applied to a credit institution falling into bankruptcy include:

a) Filing an application for opening of bankruptcy procedures;

b) Restoring business operations;

c) Liquidating assets and debts;

d) Declaring a credit institution bankrupt.

In case the State Bank of Vietnam has issued a document terminating special control of or application of solvency-restoring measures to a credit institution, after opening bankruptcy procedures, judges shall decide to apply the procedure for liquidating assets and debts under Point c of Clause 1 and declare the credit institution bankrupt without applying the procedures for restoring business operations under Point b. Clause 1 of this Article.

For cases not provided by this Decree, matters related to credit institution bankruptcy procedures comply with the Bankruptcy Law and its guiding documents.

Article 3. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Special control means the placement of a credit institution under the direct control of the State Bank of Vietnam as it is at risk of insolvency.

2. Mature debt means a sum of money or an asset which a credit institution owes to another person (below referred to as creditor) which is not secured or is partly secured (only the unsecured amount or part is taken into account) and becomes mature as agreed upon or provided by law.

Article 4. Conditions for identifying a credit institution falling into bankruptcy

A credit institution that is unable to pay mature debts upon request of creditors after the State Bank of Vietnam has issued a document on the non-application or termination of application of solvency-restoring measures or on the termination of special control is regarded as falling into bankruptcy.

Article 5. Jurisdiction of courts

1. People's Courts of provinces and centrally run cities (below collectively referred to as provincial-level People's Courts) have jurisdiction to carry out bankruptcy procedures with respect to credit institutions that have registered business with business registries in their respective provinces or cities.

2. Provincial-level People's Courts of localities where Vietnam-based foreign-invested credit institutions are headquartered have jurisdiction to carry out bankruptcy procedures with respect to these credit institutions.

Article 6. Asset management and liquidation teams

1. Simultaneously with issuing a decision to open bankruptcy procedures, the judge or the judges' group (below collectively referred to as judge) responsible for bankruptcy of a credit institution shall issue a decision to form an asset management and liquidation team to manage and liquidate assets of the credit institution.

2. An asset management and liquidation team consists of:

a) An enforcer of the judgment enforcement agency at the same level with the Court with jurisdiction to receive the application for opening bankruptcy procedures, as the team head;

b) An officer of the Court with jurisdiction to receive the application for opening of bankruptcy procedures;

c) A representative of the creditor that is the organization or individual with the biggest debt among creditors;

d) A lawful representative of the credit institution against which bankruptcy procedures are opened;

e) A representative of the State Bank of Vietnam;

f) A representative of Vietnam Deposit Insurance, in case Vietnam Deposit Insurance has paid deposit insurances to clients of the credit institution;

g) In case the credit institution owes salaries and other debts to its employees, the judge shall consider and decide whether the asset manage­ment and liquidation team has trade union's and employees' representatives as its members.

3. The organizations mentioned in Clause 2 of this Article shall appoint their representatives to join the asset management and liquidation team at the request of the judge.

4. In case the credit institution falling into bankruptcy has branches operating in different provinces and centrally run cities, the asset management and liquidation team may form assisting sections to manage and liquidate assets of these branches.

The asset management and liquidation team shall specify the composition, tasks and powers of its sections.

Article 7. Tasks, powers and working regime of the asset management and liquidation team

1. The asset management and liquidation team shall perform the tasks and powers under Articles 10 and 11 of the Bankruptcy Law.

2. The working regime of the asset management and liquidation team is defined in Article 20 and Articles 22 thru 33 of the Government's Decree No. 67/2006/ND-CP of July 11, 2006, guiding the application of the Bankruptcy Law to special enterprises and the organization and operation of an asset management and liquidation team.

Chapter II

FILING OF APPLICATIONS AND OPENING OF BANKRUPTCY PROCEDURES

Article 8. Persons with rights and obligations in filing applications for opening of bankruptcy procedures

1. The following persons may file applications for opening of bankruptcy procedures:

a) Creditors of unsecured or partially secured debts owed by credit institutions;

b) Employees of credit institutions;

c) Owners of state-owned credit institutions, shareholders of joint-stock credit institutions.

2. Lawful representatives of credit institutions may file applications for opening of bankruptcy procedures when realizing that their credit institutions fall into bankruptcy.

3. When performing their functions and tasks, if finding that a credit institution falls into bankruptcy, the State Bank of Vietnam and related agencies as defined by law have the duty to notify the persons specified in Clause 1 of this Article for consideration of the filing of applications for opening of bankruptcy procedures. Notifying agencies shall take responsibility for the accuracy of their notices.

4. Applicants for opening of bankruptcy procedures specified in Clauses 1 and 2 of this Article have the obligations and responsibilities defined in Article 19 of the Bankruptcy Law.

Article 9. Applications for opening of bankruptcy procedures

1. An application for opening of bankruptcy procedures shall be made and filed under Articles 13 thru 17 of the Bankruptcy Law.

2. An application for opening of bankruptcy procedures shall be filed with competent courts defined in Article 5 of this Decree.

Article 10. Bankruptcy charges

Payment of bankruptcy charges and advance of bankruptcy charges comply with Article 21 of the Bankruptcy Law

Article 11. Receipt of applications for opening of bankruptcy procedures

Receipt of applications for opening of bankruptcy procedures complies with Article 22 of the Bankruptcy Law.

Article 12. Notification of receipt of applica­tions for opening of bankruptcy procedures

1. Within five (05) days after receiving an application, the Court shall notify the State Bank of Vietnam thereof. Within fifteen (15) days after receiving the notice of the Court, the State Bank of Vietnam shall issue a written reply whether to apply the measure for restoring the solvency of the credit institution or to terminate the application of such measure or to terminate the application of special control.

2. If the applicant is not the owner or lawful representative of the credit institution falling into bankruptcy, within five (05) days after receiving the application, the Court shall notify this credit institution thereof. Within fifteen (15) days after receiving the notice of the Court, the credit institution shall produce to the Court papers and documents specified in Clause 4. Article 15 of the Bankruptcy Law; if the credit institution falling into bankruptcy acts as guarantee for other persons, within five days after receiving the notice of the Court, it shall notify related persons of such application.

Article 13. Return of applications for opening of bankruptcy procedures

1. The Court shall issue a decision to return the application for opening of bankruptcy procedures in the following cases:

a) The applicant fails to advance a bankruptcy charge with the time limit set by the Court;

b) The applicant is not entitled to file such application;

c) Another Court has opened bankruptcy procedures for the credit institution falling into bankruptcy;

d) There are obvious grounds that the filing of the application is not objective, badly affecting the honor, prestige and business operations of the credit institution or the application is fraudulent;

e) The credit institution is currently under special control of the State Bank of Vietnam or subject to an effective decision on the application of solvency-restoring measures;

f) The credit institution is able to prove that it does not fall into bankruptcy.

2. The applicant may complain about the return of his)her)its application under Article 25 of the Bankruptcy Law.

Article 14. Suspension of settlement of requests for fulfillment of property obligations by credit institutions falling into bankruptcy

Suspension of settlement of requests for fulfillment of property obligations by credit institutions falling into bankruptcy complies with Article 27 of the Bankruptcy Law.

Article 15. Decision to open or not to open bankruptcy procedures

1. The Court shall issue a decision to open bankruptcy procedures when all the following conditions are met:

a) The State Bank of Vietnam has issued a document on the non-application or termination of the measure for restoring the solvency of the credit institution or on the termination of special control.

b) The credit institution remains unable to pay mature debts.

2. A decision to open bankruptcy procedures must contain the details specified in Clause 3, Article 28 of the Bankruptcy Law.

3. The Court shall issue a decision not to open bankruptcy procedures when the conditions specified in Clause 1 of this Article are not fully met. Complaining about such a decision complies with Article 32 of the Bankruptcy Law.

Article 16. Notification of decisions to open bankruptcy procedures

1. A court decision to open bankruptcy procedures shall be addressed to the credit institution falling into bankruptcy, the Procuracy of the same level, the State Bank of Vietnam and Vietnam Deposit Insurance and published in the local newspapers of the places where the credit institution is headquartered and its branches are opened and a centrally daily for three consecutive days.

2. A court decision to open bankruptcy procedures shall be notified to creditors and debtors of the credit institution falling into bankruptcy.

3. The time limit for sending and notifying a decision to open bankruptcy procedures under Clauses 1 and 2 of this Article is seven (07) days from the date the decision is issued by the Court.

Article 17. Business operations of credit institutions following the issuance of decisions to open bankruptcy procedures

1. All business operations of a credit institution following the issuance of a decision to open bankruptcy procedures shall be conducted under the supervision and examination by the judge and the asset management and liquidation team. If bankruptcy procedures are opened under Clause 2, Article 2 of this Decree, the credit institution concerned may not conduct any business operations.

2. If considering that the manager of the credit institution is unable to run its business operations or his)her continued work would be unbeneficial to preservation of its assets, the judge shall, at the proposal of the creditors' meeting, issue a decision to appoint another manager who satisfies all conditions prescribed by the State Bank to run its business operations.

3. From the date of receiving the decision to open bankruptcy procedures, the credit institution is prohibited from carrying out the following activities:

a) Concealing and dispersing its assets; b) Paying unsecured debts; c) Waiving or reducing the right to reclaim debts;

d) Converting unsecured debts into ones secured with enterprise assets.

4. After receiving the decision to open bankruptcy procedures, the credit institution shall obtain written approval of the judge before carrying out the following activities:

a) Pledging, mortgaging, transferring, selling, donating and leasing assets:

b) Receiving assets from transfer contracts;

c) Terminating performance of valid contracts:

d) Borrowing money;

e) Selling, converting shares or transferring ownership of assets;

f) Paying debts newly arising from its business operations and paying salaries to its employees.

Chapter III

PROPERTY OBLIGATIONS

Article 18. Identification of property obligations

Property obligations of a credit institution falling into bankruptcy shall be identified under Article 33 of the Bankruptcy Law.

Article 19. Handling of immature debts and debts secured with mortgaged or pledged assets

Immature debts and debts secured with mortgaged or pledged assets shall be handled under Articles 34 and 35 of the Bankruptcy Law.

Article 20. Return of assets

A credit institution which has received special loans from the State Bank of Vietnam or other credit institutions or financial supports from Vietnam Deposit Insurance for restoring its business operations before the Court receives the application but cannot restore its business operations and are still applied liquidation procedures, shall return the value of special loans to the State Bank of Vietnam and other credit institutions and financial supports to Vietnam Deposit Insurance before implementing the provisions of Article 21 of this Decree on asset division.

Article 21. Order of asset division

1. The order of asset division complies with Article 37 of the Bankruptcy Law.

2. Vietnam Deposit Insurance shall become creditor of the credit institution participating in deposit insurance with the paid insurance money and be divided an asset value in the order of payment like depositors in case the credit institution becomes bankrupt.

Article 22. Identification of non-monetary obligations

Non-monetary obligations shall be identified under Article 38 of the Bankruptcy Law.

Article 23. Property obligations in case of joint or guaranteed obligations

Property obligations in case of joint or guaranteed obligations comply with Article 39 of the Bankruptcy Law. Guaranteed amounts under this provision include guarantee commitments and commitments to pay immature letters of credit, excluding certified letters of credit.

Article 24. Return of assets after credit institutions are applied liquidation procedures

1. Return of leased or borrowed assets of a credit institution to which liquidation procedures are applied complies with Article 40 of the Bankruptcy Law. This provision is also applicable to payment of sums of money and assets consigned, held or trusted at the credit institution under asset consignment, trust or management contracts. Deposits on payment accounts shall be also regarded as consigned assets under this provision.

2. In case assets specified in Clause 1 of this Article are insufficient for return, owners may claim compensation for insufficient parts like secured debts. This provision is also applicable to the return of assets to debtors with secured assets at the credit institution.

Article 25. Prohibited re-claim of assets

Prohibited re-claim of assets complies with Article 41 of the Bankruptcy Law.

Article 26. Receipt back of sold goods

The receipt back of sold goods complies with Article 42 of the Bankruptcy Law.

Chapter IV

ASSET-PRESERVING MEASURES

Article 27. Transactions considered invalid

1. Transactions are considered invalid under Article 43 of the Bankruptcy Law, except for the case specified in Clause 2 of this Article.

2. If during three months before the Court receives an application for opening of bankruptcy procedures, the credit institution is placed under special control by the State Bank of Vietnam, is applied solvency-restoring measures or receives financial supports from Vietnam Deposit Insurance, the payment of immature debts, mortgage or pledge of assets for debts, payment of deposits and inter-bank clearing payment under the control of the Vietnam State Bank are not governed by regulations on invalid transactions.

3. Creditors of unsecured debts and the asset management and liquidation team have the right to request a Court to declare transactions invalid under Article 44 of the Bankruptcy Law.

Article 28. Termination of performance of valid contracts

Termination of the performance of valid contracts complies with Articles 45, 46 and 47 of the Bankruptcy Law.

Article 29. Obligation clearing

Obligation clearing complies with Article 48 of the Bankruptcy Law.

Article 30. Assets of credit institutions falling into bankruptcy

Assets of credit institutions falling into bankruptcy shall be identified under Article 49 of the Bankruptcy Law.

Assets disposed of under Article 24 of this Decree shall not be regarded as those of credit institutions.

Article 31. Inventory of assets of credit institutions falling into bankruptcy

1. Assets of credit institutions shall be inventoried under Article 50 of the Bankruptcy Law.

2. The asset inventory table of a credit institution must indicate assets of the credit institution, assets consigned or trusted by clients at the credit institution and mortgaged and pledged assets of clients.

3. After inventorying assets, the asset management and liquidation team shall return assets trusted at the credit institution to clients on the basis of their title deeds before dividing other assets according to bankruptcy procedures.

Article 32. Sending of debt-reclaiming papers, making and posting of lists of creditors and debtors

1. The sending of debt-reclaiming papers and making of lists of creditors and debtors comply with Clause 1. Article 51; Clause 1, Article 52; and Clause 1, Article 53, of the Bankruptcy Law.

2. Lists of creditors and debtors shall be publicly posted at the head office of the court carrying out bankruptcy procedures and at the head office and branch of the credit institution falling into bankruptcy. Complaints related to these lists shall be settled under Clauses 2 and 3, Article 52 and Clauses 2 and 3, Article 53 of the Bankruptcy Law.

Article 33. Registration of secured transactions of credit institutions falling into bankruptcy

Secured transactions of credit institutions falling into bankruptcy shall be registered under Article 54 of the Bankruptcy Law.

Article 34. Application of provisional urgent measures

1. Provisional urgent measures shall be applied under Article 55 of the Bankruptcy Law.

2. Persons to whom provisional urgent measures arc applied may lodge complaints under Article 56 of the Bankruptcy Law.

Article 35. Termination of enforcement of civil judgments or settlement of cases

Enforcement of civil judgments or settlement of cases shall be terminated under Article 57 of the Bankruptcy Law.

Article 36. Settlement of court cases terminated in bankruptcy procedures

Court cases terminated in bankruptcy procedures shall be settled under Article 58 of the Bankruptcy Law.

Article 37. Obligations of banks with which credit institutions falling into bankruptcy have accounts

The obligations of banks with which credit institutions falling into bankruptcy have accounts comply with Article 59 of the Bankruptcy Law.

Article 38. Obligations of employees

The obligations of employees of a credit institution falling into bankruptcy comply with Article 60 of ihe Bankruptcy Law.

Chapter V

CREDITORS' MEETINGS

Article 39. Creditors' meetings

1. Except for the case specified in Clause 1, Article 40 of this Decree, the judge shall decide to convene a creditors' meeting when the State Bank of Vietnam has issued a document on the non-application of measures for restoring the solvency of the credit institution under Article 98 of the Bankruptcy Law.

2. Matters related to creditors' meetings comply with Articles 61 thru 77, and Articles 79 and 80 of the Bankruptcy Law.

Chapter VI

ASSET LIQUIDATION PROCEDURES

Article 40. Decision to open asset liquidation procedures in special cases

1. In case a credit institution has been placed by the State Bank of Vietnam under special control or has applied solvency-restoring measures but is still unable to restore its solvency and to pay mature debts upon request of creditors, the Court shall decide to open procedures for liquidating its assets without convening a creditors' meeting to consider application of restoration procedures.

2. The State Bank of Vietnam shall hand over results of special control or results of application of solvency-restoring measures and Vietnam Deposit Insurance shall hand over results of financial support (assets and related dossiers and documents) to the asset management and liquidation team upon its establishment.

3. After the asset management and liquidation team receives results of special control or results of application of solvency-restoring measures from the State Bank of Vietnam and results of financial support from Vietnam Deposit Insurance, the Court shall issue a decision to open procedures for liquidating assets of the credit institution.

Article 41. Details of a decision to open asset liquidation procedures

1. A decision to open asset liquidation procedures must contain principal details specified in Clause 1, Article 81 of the Bankruptcy Law.

2. A credit institution falling into bankruptcy and its creditors and debtors have the right to complain and the People's Procuracy of the same level has the right to protest the decision to open asset liquidation procedures under Articles 83 and 84 of the Bankruptcy Law.

3. A decision to open asset liquidation procedures with respect to a credit institution falling into bankruptcy shall be circulated and publicly announced under Article 16 of this Decree.

Article 42. Operation of credit institutions in the process of asset liquidation

Operations of a credit institution in the process of asset liquidation comply with Article 82 of the Bankruptcy Law.

Article 43. Termination of asset liquidation procedures

The judge may issue a decision to terminate asset liquidation procedures in the following cases:

1. The credit institution has no assets for implementing the asset division plan;

2. The asset division plan has been completely implemented.

Chapter VII

DECLARATION OF CREDIT INSTITUTIONS TO BE BANKRUPT

Article 44. Decision to declare a credit institution bankrupt

1. The judge shall issue a decision to declare a credit institution bankrupt and a decision to terminate asset liquidation procedures simultaneously.

2. Matters related to the declaration of a credit institution to be bankrupt comply with the provisions in Chapter VII of the Bankruptcy Law.

Chapter VIII

HANDLING OF VIOLATIONS AND IMPLEMENTATION PROVISIONS

Article 45. Handling of violations

Violations in the course of carrying out bankruptcy procedures shall be handled under Articles 93 and 94 of the Bankruptcy Law.

Article 46. Effect

1. This Decree takes effect on March 15, 2010.

2. While the Courts consider and settle credit institution bankruptcy procedures, the State Bank of Vietnam, Vietnam Deposit Insurance and related organizations shall supply necessary dossiers and documents at the request of the Courts.

3. The Governor of the State Bank of Vietnam, ministers, heads of ministerial-level agencies, heads of government-attached agencies, the Chairman of the Board of Directors and Director General of Vietnam Deposit Insurance, and chairpersons of People's Committees of provinces and centrally run cities shall implement this Decree.